18 Keys to Operational Excellence

Between 1992 and 2007, Freudenberg-NOK conducted more than 35,000 kaizen events and Six Sigma projects, which propelled savings in excess of $100 million. Even more, the company reduced work-in-process inventory by greater than 80%, drove its external ppm rates to less than five during that 15 year time period and has made the focus on improvement stick.

Its continuous improvement success hasnt been a straight line process from here to there, however, according to Michael Heidingsfelder, senior vice president of operations for Freudenberg-NOK. Heidingsfelder spoke during the MESA International 2010 North American conference, held June 21-23 in Dearborn, Mich. His company manufactures sealing and vibration control products.

As part of his presentation, the Freudenberg-NOK executive outlined 18 secrets to the companys continuous improvement success, not necessarily in order of importance, he noted, because they evolved over time. The list of 18 includes:

Top down. Top management must participate in kaizens and Six Sigma projects.

Steering committee. This is a group of people who continually monitors the progress of improvement activities and can bring in resources if needed.

Dedicated resources. Lean cant be a side activity, Heidingsfelder said, noting the Freudenberg-NOK had dedicated resources and people at each of its sites.

Certification process. Provide some type of reward for skill development, for demonstrations of progress by the workers.

Seize or create a crisis. Heidingsfelder outlined an example that worked like this: One of the companys facilities was reluctant to think outside the box in terms of ways to improve, he said. Company leadership found another company that could perform the plants processes better and brought it to the attention of the plant which created the crisis of potentially outsourcing the process. As a result, the manufacturing plant developed ways to improve its process.

Promote constant change.

Remove resistance.

Reward change agents.

No-layoff policy as a result of improvement projects.

Cross-functional teams.

Policy deployment.

Create a vision.

Quantify, track and report improvements and continue measuring.

Lean expert meetings. At Freudenberg-NOK, meetings were scheduled three to four times per year, had a clear agenda and provided the lean experts with opportunities to share best practices.

Schedule kaizens. They dont always have to be borne of emergencies, the executive said. A rule of thumb at Freudenberg-NOK is 10 kaizen projects per 100 people.

Lean tools and techniques.

Kaizen training.

Make it stick. One example Heidingsfelder cited: If you cut WIP by 50%, then remove 50% of the forklifts and 50% of the boxes used to hold WIP.